1. purchase a property
2. has the intention to make it PPOR
3. move in on the first date
4. move out one week later due to financial reason
5. rent out the house
6. claim all interest, repair, depreciation
7. claim CGT exempt using 6-year rule

In particular, what have you done to convince ATO in regards of point 2?

Well there you go: I always thought that was the rule. There hasn't been any ATO or judicial rulings that shed light on what is a reasonable time? I certainly know I've heard the six month rule several times before?

Terry_wStructuring Lawyer and Finance Broker - all statesBusiness Member

Well there you go: I always thought that was the rule. There hasn't been any ATO or judicial rulings that shed light on what is a reasonable time? I certainly know I've heard the six month rule several times before?

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Time is only one factor that is conisdered. there is an old ATO ID on the factors they take into account when determining whether a property is a main residencce or not

The ATO can (and will) call BS on an apparent scheme to obtain the MRE to obtain a tax benefit. The Commissioner has the power to make his own mind. And doesnt have to defend it unless you take them on. The onus is on the taxpayer to demonstrate that the home was the taxpayers main RESIDENCE and was occupied. There are plenty who try (and fail) and get done for making a false statement. The penalties just get bigger. One little lie becomes a bigger one.....

There are examples of taxpayers who fail because they lie and think the ATO don't check. ATO auditors have a job that includes checking for lies. There are genuine taxpayers who move out soon after moving in - A reasonably arguable position and facts will determine if the ATO call it out. The onus is then on the taxpayer to object / appeal etc.

If the residence is newly constructed / renovated then there may also be a 3 month requirement !!

You must move in and fully occupy the property as your home with your property and possessions and at the time you moved in must have intended that the home would be your home for a forseeable period of time with no immediate plan to depart. Your family (if you have one) must all move in and occupy also. Evidence that you did this may include occupancy accounts for power, water and actual use of those services - The AAT have cases on appeal (unsuccessful) where they found the meters hadnt even turned. Even stories from people who claimed to be in a house while they were interstate !! Data and phone connection, electoral roll and postal information, updating licenses and other records. However just changing addresses itself doesnt prove occupancy and intent. remember it is called the MAIN residence exemption....Mere occupancy isnt enough. You must reside

I have had a client move out after a few days. He had proof of moving in (Army paid for his relocation into his home) and his reason for leaving was very clear - He was given orders to move interstate given a few days after he moved in. We retain all this on file. The shorter the period the more circumspect the ATO will be. If you moved in and then moved out as a charade you likely have not satisfied the main residence test and so absence will not count.

Relevant factors (which should not be considered individually as acceptable)

length of time lived in dwelling

family ?

belongings

mailing address

electroral roll

services connected

intentions

free choice v's obligation to sppend time at another residence (ie jail)

actual occupancy v's intention only. ie you MUST commence to reside

Question - Did you rent out the property prior to moving in and so you moved out ? This has also been found to affect the MRE on review.

The residency status for a loan has no bearing BUT if you tell the ATO its owner occupied and tell a lender its investment that inconsistency could pose a question. Same as what you tell a lender

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